The K-cups avalanche in the coffee aisle

After getting its foothold in the office segment of the market, single-serve beverage brewing has experienced tremendous growth with widespread and continued adoption in the retail market.  Research conducted by the National Coffee Association (NCA) in 2012 found that 36% of respondents who had a single-serve brewing system obtained it within the last six months, indicating just how fast this segment of the beverage market has been growing.

As a result, the packaged coffee category at retail is undergoing a a substantial transformation.  U.S. retail market coffee sales grew at an impressive 10% in 2012 thanks to the single cup segment, which increased 82%.  Single-cup coffee sales, at $415 million at the close of 2011, rose to $922 million in 2012.   Single-cup coffee sales have thus grown to account for over a fourth of the total coffee dollar sales in grocery (Progressive Grocer, April 24, 2013).

Several factors are contributing to this sea change in what was a seemingly mature market:

• A nation of dedicated coffee drinkers

• Consumer desire to recreate coffee shop quality at home

• Continued adoption of single-serve brewers in offices and hotels

• Innovations in brewer technology supporting enhanced beverage quality

• A large selection of brewers to choose from, many of which are aggressively marketed and attractively priced

• Popularity of single-serve brewers as a hot kitchen gadget, well suited for holiday gift giving

• A wide selection of single-serve beverage options that continues to expand

• Recent increase in published reports of the health benefits associated with coffee consumption